With funds exhausted by lawsuit, LeClair raises irrigation rates for usersFeb 13, 2013 By Eric Blom, Staff Writer
Legal expenses over the past two years drained the reserves of the LeClair Irrigation District, so the district is increasing its rates to raise capital. The irrigation district's board of commissioners discussed the new rates with about 100 irrigators at a Jan. 30 meeting at the Riverton Branch Library.
The charges for small irrigators, those with fewer than 3.68 acres, will go from $51.50 an acre to $77. Larger irrigator's rates are going from $14.50 to $18 an acre.
The district also will levy a one-time, special charge of $100 per irrigator. The rates will have to go through district court and will provide revenue for 2014.
The LeClair Irrigation District operates a 33-mile canal to provide water for 1,522 users and 13,500 acres on the north side of the Wind River.
LeClair Irrigation District 3 commissioner Terry Betts said the district has spent more than $342,000 on legal fees since the summer of 2011, draining its surplus funds.
"These funds have been accruing for the last 15 years," Betts said.
The district also owes $50,000 on a $150,000 loan it took out in March 2012, Betts said.
"We're at the point right now where we're just going to need some help," Betts said. "We're not trying to get a whole heck of a lot of money."
The district expects to raise roughly $441,000 with the new rates and one-time charge, an increase of about $223,000. The money will go toward paying back the loan and hiring one or two new employees, among other expenses.
LeClair's legal expenses arose from a lawsuit in which the U.S. government, joined by the Northern Arapaho and Eastern Shoshone tribes, allege the irrigation district and its former operations manager are liable for failing to remove a series of dikes in the Wind River and correcting the waterway's course.
The federal government filed suit in May 2010 in Wyoming's U.S. District Court against the former operations manager, Johnny Hubenka, and amended the suit in March 2011 to include LeClair.
In 2004, Hubenka was convicted of violating the Clean Water Act by constructing four illegal dikes in the river while under LeClair's employment.
Hubenka's sentence included one year of probation and an order to remove the dikes and restore the river's course. He was to develop a restoration plan at his own expense to be approved by the Environmental Protection Agency.
Hubenka never submitted a plan claiming he lacked funds to prepare one, and the dikes remained in place until flooding in 2011 washed them out.
LeClair maintains that Hubenka was acting as in individual when he built the dikes and that the irrigation district was not involved. The federal government "readily admits that it has brought LeClair into this action solely in the hopes that its pockets are sufficiently deep to construct the designer river that it demands," LeClair alleges in the final pretrial order.
The Eastern Shoshone and Northern Arapaho tribes joined the litigation, both alleging that Hubenka's actions changed the river's course, disrupting the river's ecosystem, and disturbing tribal hunting grounds.
The trial ran for eight days in January 2012 in Lander, but Judge Allen B. Johnson has not yet made a decision.
LeClair District 2 commissioner Ray Blumenshine said he expects the case to go to the appeals court.
If LeClair is successful, it could recoup some of its legal fees.
Betts said an appeal would not incur many more legal expenses, though.
The district completed two construction projects in 2011 and two in 2012 before the commissioners knew their legal fees would mount up as they did, Betts said.
Eventually, though, the money dried up, even the funds that could have been used to match grant funds.
"It got to the point we could no longer do construction projects," Betts said. "We had to turn $138,000 back to the state."
Commissioners said they have no construction projects planned for 2012.
Many in the audience had tough questions about the need for the extra fees, the background of the lawsuit and legal expenses, and accountability in how new revenue will be spent, but few voiced outright opposition to the raised costs.
One man asked if commissioners would tell irrigators what continuing legal expenses are.
Betts said that information is available at the commission's monthly meetings.
Another man in the audience said, "You don't really even know if the $223,000 will be enough."
Commissioners said the City of Riverton, country club and cemetery will also pay these rates, but the new rates will be permanent. The country club and each homeowner living near it will pay the $100 fee.
"Do you have enough money for operating in 2013?" another man asked.
"We'll sure try," Blumenshine responded, adding the district could borrow money again if necessary.
LeClair business manager Kathy Gosnell responded to two questions about the budget, saying it will be ready in July.
Another man in the audience said the higher rates are a "small price to pay" and asked if commissioners would provide a refund if the district wins its lawsuit.
"If we win the lawsuit, let's do some kind of good," he said.
Commissioners said users who object to the rate hikes can attend the budget meeting.